J. Dinkins G. Grange is an attorney in Northeast Florida, helping his clients find solutions to their financial problems, which in some cases includes bankruptcy in some cases. This Blog contains general bankruptcy relevant information. His practice includes representing clients in various areas of civil litigation including Fair Debt Collection Practices Act, Chapter 7 and Chapter 13 bankruptcies, foreclosure defense and probate.

Wednesday, May 23, 2012

Can Taxes owed to state or federal
entities be discharged in bankruptcy? Well that depends. The
bankruptcy code outlines what taxes may be discharged. For a brief
overview, there are six requirements (you must meet all six
requirements):

THREE YEAR RULE: The three year
rule: for the tax year in question, the most recent due date for
filing the return is more than three years old;

TWO YEAR RULE: A tax return has
been filed at least two years preceding the filing date of the
bankruptcy;

TWO HUNDRED AND FORTY DAY RULE:
The tax claim was assessed at least more than 240 days preceding the
filing date of the bankruptcy;

TAX IS ASSESSABLE BUT NOT YET
ASSESSED;

NON-FRAUDULENT RETURN; and

NO WILLFUL TAX EVASION.

Obviously, the above is only a
preliminary test to see if you need to look further to see is a tax
due to a state or federal entity may be discharged. If you think
taxes you owe might be dischargeable, you should seek the advise of a
bankruptcy attorney.

Monday, May 21, 2012

Scams do not take a holiday, they look for a holiday. According to a recent article in the Los Angeles Times (May 6, 2012) entitled "Scam Watch: Memorial Day, Foreclosure Rescue, Investment Scheme", Memorial Day has become an active day for criminals. It appears both active duty military, veterans, and their families are targeted by scammers.

According to the article, the scams include criminals soliciting money over the phone for military charities, as well as calls from people alleging they are from the Veterans Administration, and asking for credit card, bank account, or other financial information.

The article also notes some recent scams, including one committed by Frederic Alan Gladle from Austin, Texas, who delayed foreclosure for a fee. He would submit false documents in bankruptcy court, thereby delaying the foreclosure proceedings. Earlier this month he received 61 months in federal prison.

Another person was able to raise money by alleging his company was about to be acquired by Microsoft. He received 22 years in federal prison.

Sunday, May 20, 2012

UPDATE: Since the posting of this blog, the Supreme Court has reversed the Eleventh Circuit:

See http://jacksonville-bankruptcy-grange.blogspot.com/2015/06/second-mortgage-in-chapter-7-bank-of.html

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Lien Stripping in a Chapter 7 case? The 11th Circuit Court of Appeals says it is OK, which is a minority decision.

The 11th Circuit Court of
Appeals recently interpreted a Supreme Court ruling differently than
most other courts in other jurisdictions. If you have been studying bankruptcy, then
you know the courts require a discharge in a Chapter 13 as a
prerequisite to stripping off of a lien to real property. So, what
does this mean. Essentially, if you have a second mortgage that is
completely unsecured (the balance of the 1st mortgage is
more than the value of the property, so the second mortgage is
unsecured), the only way to get rid of the second mortgage is to
obtain an order from the court allowing a strip off of the lien upon
receiving a discharge in a Chapter 13.

Most courts around the country have
interpreted the Supreme Court ruling as disallowing the strip off of
a lien when it disallowed the cram down of a lien in a Chapter 7.
Well, the 11th Circuit (the Middle District of Florida is
in the 11th Circuit) court of appeals has just ruled a
mortgage can be stripped off in a Chapter 7 bankruptcy. (In Re:
Lorraine McNeal). The court said, for the most part, the Supreme
Court has never ruled on a strip off of a lien, just a cram down, and
as such, they are free to interpret this part of the bankruptcy code.

So, will the local bankruptcy courts
follow the 11th Circuit? We do not know. This case just
came down. You see, even though the 11th Circuit ruled,
this is actually a persuasive ruling the local bankruptcy court
should consider. Of course, all cases have to be decided by the
Court on a case by case basis.

Monday, May 7, 2012

So you set up an appointment for a
bankruptcy consultation. What next?

First of all, relax. People
tend to get nervous, or anxious, when needing to speak with an
attorney. Remember that any attorney that agrees to represent you
will be your advocate. The consultation is so the attorney can
understand you particular situation, and advise you as to what your
various options are regarding the filing, or not filing, of
bankruptcy.

I know what you are thinking, “not
filing”? Make sure you ask the attorney if he or she practices
under the Fair Debt Collection Practices Act. Yes, there are
alternatives to filing bankruptcy.

What to Bring:

7 months pay advises.

Payoff figures on secured assets
(approximate)

Value of secured assets
(approximate)

Number of payments left on
assets, if less than 60.

Year, Make, Model, and mileage
of vehicles.

Generally, my consultations last
approximately an hour, with some being a little longer. It is
helpful to have the items on the above list. A short discussion of
each is as follows:

Pay advises, such as pay stubs,
or other document reflecting the gross income and withholding you
have had during the past 7 months, for you and your spouse (even
if the spouse is not filing). If you and your spouse live in
separate households, make sure to let the attorney know, as
special rules may apply to your situation.

Payoff figures are needed to
determine how much longer you have to pay, and how much, if any,
equity you have in the property.

Value. This is need in many
situations to, again, determine how much equity is in the
property. The equity is important because is helps determine what
assets you have from a bankruptcy perspective.

Number of Payments. This is
important should your income be more than the median income for a
household of you size in the state in which you live, to determine
which form of bankruptcy you may be able to file. It may also be
useful in advising you what to expect depending on when you file.

Year, Make, Model and mileage.
This is useful in determining value and other useful information,
such as deductions, when filing. Again, it can help in being able
to advise you as to what to expect through the various forms of
bankruptcy, or in some cases, what to expect if seeking other
forms of debt relief.

While a consultation can still be done without these items, being the documents ask for often helps in facilitating the consultation and enables the client to receive much more accurate information regarding their particular case.

Tuesday, May 1, 2012

As a bankruptcy attorney in Jacksonville, Florida, I practice in several areas of debt relief, including foreclosure defense. The following blog is created with the intent of provoking discussion, addressing bankruptcy, Trustees, and the debtors wishing to retain their homes, when the mortgage is upside down.

So do you want to be in bankruptcy? Of
course not. And if you are also having your house foreclosed on, you
certainly don't want that either. So when you go to your local
attorney, you are advised as to whether or not you should file
bankruptcy, and what chapter you can file. You may also be advised
as to whether or not you can keep your house. If you are looking to
discharge you debts through bankruptcy, and upside down on your house
(that is, your 1st mortgage is higher than the value of
the real property), you may find this blog post interesting.

In Florida, there is reportedly a case
where a debtor decided not to claim a homestead exemption on Schedule
C of his bankruptcy paperwork, thereby allowing the debtor to claim a
$4,000 wild card exemption; this is another way of saying the debtor
can get though the bankruptcy and keep an extra $4,000 worth of
property. The Trustee and the mortgagee came up with the bright idea
of paying the Trustee to short sale the house. This would allow the
mortgagee to foreclose on the house in a very efficient and timely
manner, put some money in the Trustee's pocket, and avoid having to
possibly fight a judicial foreclosure.

The problem with this lies with the
duties of the Trustee, as the duties outlined in the bankruptcy code
do not include the trustee acting as a foreclosure attorney. Another
problem lies with the property itself. If there is no equity, is the
property a bankruptcy asset. There is a very strong argument that
can be made that the property, with no equity, is not an asset of the
bankruptcy estate.

UPDATE: The practice of at least one of the Trustees in the Jacksonville Division is to ask the bank to pay him to short sale the property. This is possible if 1) the debtor does not claim the property as exempt homestead property, and 2) the bank agrees. If you are filing the the Jacksonville Division, make sure you get the advise of an attorney before choosing to NOT claim your property as homestead.

A second case in Florida deals with the
Trustee deciding to tell a debtor to get out of their house when the
house is not claimed as exempt. Under the bankruptcy code, a trustee
either has to administer the asset or abandon it. If the debtor
simply moved out of the property, the debtor may be subject to fines
and penalties for not maintaining the house. These fines and
penalties would not be discharged in the bankruptcy because they
occurred post petition. Of course, we still have the problem of
whether or not the property is even property of the bankruptcy estate
to begin with.

A third case deals with the trustee
charging the debtor rent to stay in the house. That's right! The
problem here is to some extent obvious; that's right, the house may
not be a bankruptcy trust asset to begin with. But something you may
not have though of is, does the Trustee really want to be a
landlord, that is, they would be responsible to maintaining the
property. As far as I know, the typical Trustee does not want to
deal with landlord type problems; you know, the faucet leaks, the
plumbing is stopped up, the grass need mowing, etc. It is also my
understanding, in some jurisdictions, a landlord, or in this case
perhaps a property manager, would need to be licensed by the state.

Should a Trustee be able to take a
house with no equity? To what extent does the bankruptcy code
require the trustee to maintain the asset? If you have any thoughts
of enlightenment on this issue, please let me know below.

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Jacksonville Bankruptcy Attorney -- J. Dinkins G. Grange, Esquire

I am a consumer bankruptcy attorney
helping people with their financial situations. As a bankruptcy lawyer, I help people find
various alternatives towards handling their financial problems, and
if needed, I can provide legal assistance to consumers seeking relief
under the bankruptcy code. I can be contacted by email at dgrange@grangelaw.org. I am available by appointment
during the week and most evenings.

I am located in Green Cove Springs on North Street, and Middleburg on Palmetto Street.

I am a member of the National
Association of Consumer Bankruptcy Attorneys (www.nacba.org),
Jacksonville Bankruptcy Bar Association, American Bar Association,
Florida Bar, and Jacksonville Bar Association.

I have also been designated a debt
relief agency by Congress and the United States Supreme Court and I
help clients file for bankruptcy relief under the bankruptcy code.

Disclosure:

We are a debt relief agency. We help clients file for bankruptcy relief under the Bankruptcy Code. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. This blog site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.